Navigating Tariff Challenges

I will block any political commentary instantly. This is not about politics…This is about not ignoring the elephant in the marketing room. Here are SPECIFIC tactics to use because of the impact of the Tariff discussion…. It doesn’t matter if tariffs directly affect your business because they directly affect your prospects and customers. No matter what industry – business or consumer. Here are some very specific tactics to consider ensuring your marketing is doing as well as possible as these economic changes occur… When costs rise (or people think they will rise) it’s the marketer’s job to: ✔️ Message it ✔️ Protect brand trust ✔️ Retain conversions ✔️ Do more with less Here’s how to tactically adjust your marketing in response, with strategies broken down for both Business and Consumer audiences: Business to Business: Communicate Pricing Adjustments Transparently Use phrases like “Price Transparency” or “No Surprises” in subject lines, landing pages and websites. EVEN IF PRICING DOESN’T CHANGE you should tell everyone that. They don’t know what you know about your business. Use “Price Adjustment Transparency” Messaging Promotional Email Subject lines: -No Surprises: Here’s Why Pricing Is Changing -How We’re Managing Rising Costs—So You Don’t Have To STAT:🧠 Edelman: Transparent brands are 22% more likely to retain loyalty in economic downturns. Focus on ROI + Cost Consolidation Promotional Email Subject lines: -This replaces 3 other platforms -Spend smarter, not more -Same output. Lower cost. Make the CFO your marketing partner. STAT: 💡Kantar found that value-driven messaging during the 2008 recession boosted response rates by up to 15%. Annnnd - MUST DO! Prioritize Case Studies + Social Proof When stakes are high, buyers seek safety. For CONSUMER Marketers: Align With Search Behavior: Google shows spikes in search terms like “best value,” “trusted brands,” and “most reliable” during downturns. Use these phrases in subject lines and CTAs to match consumer intent. Show You’re on Their Side: STAT: McKinsey notes that 57% of consumers actively look for “value packs” and “fair pricing” during tough times. Be explicit in messaging: “Bundle & Save”, “Price Lock Guarantee”, etc. This isn’t about politics. This is about not ignoring the elephant in the marketing room. People want to feel comfortable when things get uncomfortable. 

Another ripple effect of rising tariffs. U.S. Customs requires entries to be backed by a bond. A continuous bond must be in an amount to cover at least 10% of the duties paid in a year. Until recently, tariff rates have been relatively constant, and most importing companies have had the same bond renewed year after year. Set it and forget it. But in 2025, tariff rates being two, three, or five times what they had been means U.S. Customs is requiring importing companies to have continuous bonds in higher amounts. Surety companies typically require some form of collateral from importing companies to back the continuous bonds they issue. This is often in the form of a bank guarantee. Many importing companies have lines of credit with their banks where they borrow against inventory, essentially using inventory in their warehouses or on the water as collateral for their bank loans. But when they seek much larger bank guarantees to back much larger bonds to cover much higher rates of duties, it conflicts with their ability to borrow against inventory. It’s conceivable that they can find themselves undercollateralized, and the bank might not provide that guarantee to the surety, and they are unable to obtain that increased Customs bond, at which point U.S. Customs ceases releasing their shipments. We live in interesting times.  Photo by Andy Li via Unsplash #Import #Trade #Compliance #Tariffs

Given the plan to have the steel & aluminum tariffs jump to 50% this week, I wanted to share data on the downstream industries whose cost structures are most impacted by this action. I've done this by using the latest benchmark use table from the input-output accounts (https://lnkd.in/eQdPji9) and calculated each industries' combined use of (i) Iron and steel mills and ferroalloy manufacturing [331110]; (ii) steel product manufacturing from purchased steel [331200]; (iii) Alumina refining and primary aluminum production [331313]; and (iv) Aluminum product manufacturing from purchased aluminum [33131B]. I then summed the use across these four commodities and divided this sum by each industries' total intermediate inputs (which includes all goods, utilities, and services). Below are the top sectors. Thoughts: •For many industries in fabricated metals (starting with NAICS 332), we see steel and aluminum make up more than 40% of the cost structure. If we assume that domestic prices ultimately rise something like 35% from a non-tariff scenario, that would represent a 15% increase in costs. This is a conservative estimate because I'm using all intermediate inputs as the denominator; if I used only goods and utilities, this figure would be much higher. •As expected, we see substantial impacts on transportation equipment (the major impact on military armored vehicles is a bit ironic) and machinery. Transportation equipment and machinery are two sectors where the USA is very globally competitive; these tariffs make us less competitive by raising producers' costs. For example, the last thing John Deere needs is to be paying higher prices for steel and aluminum as it tries to compete with European rivals for business in Australia. •It's worth again stressing these affected downstream industries employ far more people than employed in making steel and aluminum. This is why tariffing upstream industries has been termed "Self-Harming Trade Policy" (see https://lnkd.in/gWgxQjtY). Implication: many industries will be starting this week with the reality that they are looking at their costs rising substantially due to POTUS's steel and aluminum tariff escalation. This is precisely the type of action that makes the FOMC less likely to reduce interest rates anytime soon. #supplychain #economics #shipsandshipping #manufacturing #freight

Who's paying for Trump's tariffs? Foreign exporters or U.S. importers? A new paper by Gita Gopinath and Brent Neiman provides a clear answer: "When a 10 percent tariff is imposed on an imported good, U.S. importers appear to pay 8-10 percent more, including the tariff, for that good". "Exporters have, on average, not dropped their prices." "Given the high pass-through to import prices and the importance of imported inputs in U.S. manufacturing, much of the incidence of the tariffs falls on U.S. producers." Read the full paper here: Gita Gopinath and Brent Neiman (2025), The Incidence of Tariffs: Rates and Reality: https://lnkd.in/ehk-DBZw

The Trump administration tariff authority is the rollercoaster of the decade. ➠ February: Supreme Court strikes down IEEPA tariffs. Administration says it has a backup. ➠ May: Court of International Trade stays CBP collection of Section 122 tariffs. Administration pivots again. ➠ June: Court of Appeals for the Fed Circuit overrules the stay and the Admin adds Section 301 investigations for tariffs under slave labor provisions. But the pattern is clear. For importers, this legal carousel is destroying your ability to do business. Every time a court strikes down a tariff, the trade agreements built on that tariff become questionable. Your sourcing strategy becomes less reliable. Your supplier contracts become riskier. The real cost isn't the tariff rate. It's the uncertainty. ▶ Here's what matters: Congress controls tariff power, not the president. The Constitution is clear. The courts keep proving it. No matter which statute the administration tries next, the same legal argument applies. ▶ For food importers and FDA-regulated companies: File your IEEPA refund claims now. Don't wait. Early filers are getting processed. Late filers are missing windows. File Section 122 protests. Within 180 days from liquidation. Don't assume courts will fix it for you. Stop planning around tariffs that courts keep striking down. Plan around the legal reality: this uncertainty isn't ending until Congress acts. #Tariffs #FDA #ImportCompliance #SupplyChain #TradePolicy

We are thrilled to launch our latest research, uncovering the cost of new US tariffs on UK retailers with partner ESW. For UK non-food retail exporters, the US has been a fast-growing market since Brexit, outpacing domestic growth to reach £4.1bn in 2024. However, the US introduced a baseline 10% import tariff on imports from most trading partners, including the UK, alongside a 30% tariff on certain Chinese imports. This has immediate implications, including: ➡️ Increased landed costs: Margin pressure from baseline and reciprocal tariffs. ➡️ China-origin complexity: Disrupted DTC models due to loss of the $800 de minimis threshold. ➡️ Product strategy pressure: Strategic product withdrawals and sourcing shifts to navigate cost volatility. ➡️ Market hesitation: Delayed or reduced expansion plans into the US. By modelling trade flows and tariff rates on retail products, we calculate that UK non-food retail exporters are having to mitigate £618.5m in additional tariff costs from new US policy. Faced with rising tariff costs and mounting uncertainty, UK retailers have begun to implement a range of mitigation strategies to offset these additional costs. Four key tactical responses include: ➡️ Passing costs on to consumers: Some brands, supported by pricing power or strong equity, are passing on a portion of tariff costs – but this remains limited. Only 20% of the total cost is being passed through to consumers. ➡️ Absorbing costs: Around 16% of the tariff impact is being absorbed directly through reduced profit margins. ➡️ Exposure management: Retailers are reassessing product-level viability, pausing activity or withdrawing SKUs where tariffs have rendered them commercially unviable. ➡️ Cost efficiencies: Businesses are pursuing internal savings through strategic restructuring, supplier renegotiation and leaner operational practices. Specific responses by retailers vary by product, category and market, and will evolve over time. Read more about the responses in our latest research by downloading the full report here: https://lnkd.in/eVuYvkcb

CFO: Tariffs just nuked our margins. Cut all non-performing brand spend. CMO: Before we react, let's define what "non-performing" and "brand" actually mean. CFO: We're facing real financial impact. People's jobs are at stake. CMO: Exactly why we need balance. Welcome to The Tariff Balancing Act. CFO: When margins are threatened, we need immediate action. CMO: Brand building isn't Super Bowl ads—it's increasing the probability customers choose us when they re-enter the market. CFO: And "non-performing"? CMO: Spend that doesn't show up in short-term attribution models but builds preference that drives future sales. CFO: We need results now, not theoretical future benefits. CMO: The 95-5 Rule is even more relevant—with tariffs, 98% of potential customers are out-of-market right now. CFO: So even fewer in-market buyers when we desperately need revenue. CMO: Which makes preparing the 98% for when they return absolutely critical to our recovery. CFO: But we need contribution dollars this quarter, not next year. CMO: We need both. True performance is maximizing incremental dollars across all time horizons. CFO: Distribution timeline? CMO: Exactly. Tariffs compressed everyone's vision to immediate results, creating a strategic opportunity. CFO: Still not seeing how maintaining brand spend helps us navigate these tariffs. CMO: While competitors slash brand spend, the gap between perception and reality widens for their customers. CFO: So we maintain strategic presence while they disappear? CMO: It's not all-or-nothing. We should cut truly non-incremental spend while protecting what builds future preference. CFO: A balanced approach when everyone else is overreacting? CMO: The brands finding balance at The Tariff Balancing Act—not just cutting or spending—will emerge strongest. CFO: Thoughtful decisions that consider both today's margins and tomorrow's growth. CMO: When the economic playlist throws its hardest track, the brands that maintain balance between today and tomorrow win the Grammy.

With the latest tariffs changes, product design is no longer just a functional step, it has become a strategic imperative. The latest U.S. tariff measures are sending shockwaves through global supply chains, but they also offer a unique chance for companies to rethink how they build resilience and flexibility into their products and operations. At Kearney, we call this approach Lift, Redesign and Shift: - Lift: Reconsider your supply chain footprint. - Redesign: Create products optimized for domestic production, tariff adaptability, and market localization. - Shift: Move production where it makes most strategic sense. Three practical design strategies stand out: 1. Design for Domestic Manufacturing: reduce dependence on foreign suppliers. 2. Design for Tariffs: use modular, adaptable components for flexibility. 3. Design for Localization: tailor products to local market needs and regulations. What seems like a disruption today can be a catalyst for smarter, more competitive business models tomorrow. Tariff-conscious design is a clear growth and innovation opportunity. #supplychain #productdesign #manufacturing #Industry40 #tariffs #businessstrategy #localization #modularity #reshoring Bharat Kapoor Marcos Mayo Igor Hulak Adham Sleiman Kearney Kearney Middle East and Africa Kearney PERLab (Product Excellence Renewal Lab) Read more: https://lnkd.in/dnHt43nq

𝗖𝗠𝗢’𝘀 𝗣𝗲𝗿𝘀𝗽𝗲𝗰𝘁𝗶𝘃𝗲: 𝗖𝗮𝗻 𝗖𝗣𝗚 𝗯𝗿𝗮𝗻𝗱𝘀 𝗽𝗿𝗼𝘁𝗲𝗰𝘁 𝗺𝗮𝗿𝗴𝗶𝗻𝘀 𝗶𝗻 𝘁𝗵𝗲 𝗻𝗲𝘄 𝘁𝗿𝗮𝗱𝗲 𝗿𝗲𝗮𝗹𝗶𝘁𝘆? (Welcome to 2nd Trump Tariffs Era) Tariffs are back, and they are hitting the bottom line harder than ever. With new trade barriers on China, Canada, and Mexico, CPG brands face a triple threat: rising costs, shrinking consumer demand, and disrupted supply chains. But here’s my question: Are we playing defense, or are we strategically pivoting? From what I can see, data tells us a clear story. Historically, high tariffs = lower trade competitiveness. Let's take a look at the U.S. Average Tariff Rates (1821-2016) and trade balance trends: ✅ When tariffs were high (pre-1940s), trade was limited, and the U.S. maintained a surplus. ✅ Post-1945, lower tariffs (via GATT & WTO) fueled economic expansion and trade growth. ❌ After the 1971 Bretton Woods collapse, trade deficits deepened as low tariffs persisted. 🚨 Today, reintroducing high tariffs could lead to cost-driven inflation, supply shocks, and loss of global competitiveness. ++ 𝗪𝗵𝗮𝘁 𝗧𝗵𝗶𝘀 𝗠𝗲𝗮𝗻𝘀 𝗳𝗼𝗿 𝗖𝗣𝗚𝘀 & 𝗗𝗶𝗴𝗶𝘁𝗮𝗹 𝗖𝗼𝗺𝗺𝗲𝗿𝗰𝗲 ++ - Higher Input Costs → Tariffs on raw materials (aluminum, steel, packaging) increase COGS, cutting into margins. - Consumer Price Sensitivity → Higher shelf prices = lower demand. Consumers switch to private labels, local substitutes, or DTC (Direct-to-Consumer) models. - Erosion of Market Access → Retaliatory tariffs make U.S. brands more expensive abroad, favoring European and Asian competitors. - Disrupted Global Supply Chains → Companies must rethink sourcing, warehousing, and last-mile logistics. ++ 𝗖𝗠𝗢 & 𝗖𝗙𝗢’𝘀 𝗣𝗹𝗮𝘆𝗯𝗼𝗼𝗸 𝗳𝗼𝗿 𝗡𝗮𝘃𝗶𝗴𝗮𝘁𝗶𝗻𝗴 𝗧𝗮𝗿𝗶𝗳𝗳𝘀 ++ 1️⃣Pass-Through Pricing? Be Selective. Don’t just raise prices. Instead, optimize pack sizes, value-tiered offerings, and bundling strategies to maintain affordability. 💡Data-driven pricing elasticity is key—test price sensitivity before making abrupt hikes. 2️⃣ De-Risk Your Supply Chain Nearshoring & Friendshoring → Reduce tariff exposure by shifting suppliers to Mexico, Vietnam, and Eastern Europe instead of China. 💡Dual-sourcing strategies ensure supply continuity amid trade wars. 3️⃣ Digital Commerce is the Safety Net DTC & eCommerce are the antidotes to tariff turmoil. 💡Selling via Amazon, Shopify, or localized fulfillment centers avoids tariff-heavy distribution routes. 💡Localized production + micro-fulfillment hubs = reduced cross-border shipping costs. 4️⃣ Work Capital & FX Strategy Matters More Than Ever Hedging currency risks & cash flow forecasting is critical when tariffs disrupt inventory costs. 𝗧𝗼 𝗮𝗰𝗰𝗲𝘀𝘀 𝗮𝗹𝗹 𝗼𝘂𝗿 𝗶𝗻𝘀𝗶𝗴𝗵𝘁𝘀 𝗳𝗼𝗹𝗹𝗼𝘄 ecommert® 𝗮𝗻𝗱 𝗷𝗼𝗶𝗻 𝟭𝟯,𝟱𝟬𝟬+ 𝗖𝗣𝗚, 𝗿𝗲𝘁𝗮𝗶𝗹, 𝗮𝗻𝗱 𝗠𝗮𝗿𝗧𝗲𝗰𝗵 𝗲𝘅𝗲𝗰𝘂𝘁𝗶𝘃𝗲𝘀 𝘄𝗵𝗼 𝘀𝘂𝗯𝘀𝗰𝗿𝗶𝗯𝗲𝗱 𝘁𝗼 𝗲𝗰𝗼𝗺𝗺𝗲𝗿𝘁® : 𝗖𝗣𝗚 𝗗𝗶𝗴𝗶𝘁𝗮𝗹 𝗚𝗿𝗼𝘄𝘁𝗵 𝗻𝗲𝘄𝘀𝗹𝗲𝘁𝘁𝗲𝗿. #tariffs #CPG #FMCG #CMO

Pricing transparency around tarrifs just became a corporate minefield and major retailers are rethinking how they display cost factors at checkout: Some specialty retailers are embracing full disclosure: • Amazon considered displaying tariff fees on its Amazon Haul marketplace • Temu has already started explicitly showing tariff impacts • Niche brands like Dame are adding specific "tariff surcharges" • Jolie Skin Co is building dedicated software to display tariff fees • Electronics manufacturer Crestron is implementing a 12% fee to offset costs Companies must now decide: 1. Absorb tariff costs (reducing margins) 2. Raise prices silently (risking competitive disadvantage) 3. Add explicit surcharges (potentially impacting conversion) My takeaway: Price transparency is rapidly becoming not just a business strategy, but also a political stance in an increasingly charged environment. As global import fees and supply chain costs continue to shift unpredictably, the way companies choose to communicate these changes will significantly influence consumer expectations and market dynamics.